MP Materials (NYSE:MP) Shares Down 4.3% - Should You Sell?

Key Points

• MP Materials shares fell 4.3% to about $41.28, below both the 50-day and 200-day moving averages, with trading volume slightly above average.
• Analyst sentiment remains broadly positive: the stock has a consensus “Buy” rating and an average price target of $79.42, despite one “Sell” rating and several target-price reductions.
• The company exceeded quarterly expectations, reporting $0.03 in EPS and $90.65 million in revenue, up 49.1% year over year. However, MP Materials remains unprofitable, while recent insider activity included substantial sales alongside one COO purchase.

Shares of MP Materials Corp. (NYSE:MP - Get Free Report) dropped 4.3% on Tuesday . The company traded as low as $39.91 and last traded at $41.2840. 7,007,622 shares traded hands during mid-day trading, an increase of 7% from the average daily volume of 6,555,389 shares. The stock had previously closed at $43.13.

Analyst Upgrades and Downgrades

A number of equities research analysts recently commented on MP shares. Canaccord Genuity Group set a $82.00 target price on MP Materials in a report on Friday, May 8th. Citigroup reiterated a "positive" rating on shares of MP Materials in a report on Wednesday, July 15th. Morgan Stanley raised their price target on shares of MP Materials from $70.00 to $71.50 and gave the stock an "overweight" rating in a research report on Wednesday, July 8th. Barclays decreased their price objective on shares of MP Materials from $69.00 to $65.00 and set an "overweight" rating for the company in a research note on Thursday, July 16th. Finally, Weiss Ratings reiterated a "sell (d-)" rating on shares of MP Materials in a research note on Friday, July 17th. Two investment analysts have rated the stock with a Strong Buy rating, sixteen have issued a Buy rating and one has issued a Sell rating to the company. According to MarketBeat.com, MP Materials presently has an average rating of "Buy" and a consensus target price of $79.42.

MP Materials Stock Down 4.3%

The company has a quick ratio of 6.58, a current ratio of 7.18 and a debt-to-equity ratio of 0.47. The stock has a market cap of $7.35 billion, a PE ratio of -98.30 and a beta of 1.86. The business has a 50 day moving average price of $56.06 and a 200 day moving average price of $58.78.

MP Materials (NYSE:MP - Get Free Report) last posted its earnings results on Thursday, May 7th. The company reported $0.03 EPS for the quarter, topping the consensus estimate of ($0.01) by $0.04. MP Materials had a negative return on equity of 2.27% and a negative net margin of 28.00%.The firm had revenue of $90.65 million for the quarter, compared to analyst estimates of $74.82 million. During the same period last year, the company earned ($0.12) earnings per share. MP Materials's revenue for the quarter was up 49.1% compared to the same quarter last year. Equities research analysts expect that MP Materials Corp. will post 0.04 EPS for the current fiscal year.

Insider Activity

In other news, COO Michael Stuart Rosenthal bought 17,000 shares of the stock in a transaction dated Wednesday, May 20th. The shares were acquired at an average cost of $56.62 per share, with a total value of $962,540.00. Following the purchase, the chief operating officer directly owned 1,333,673 shares in the company, valued at $75,512,565.26. The trade was a 1.29% increase in their position. The transaction was disclosed in a filing with the SEC, which is available through the SEC website. Also, CFO Ryan Corbett sold 20,000 shares of MP Materials stock in a transaction dated Friday, May 8th. The shares were sold at an average price of $75.00, for a total value of $1,500,000.00. Following the completion of the transaction, the chief financial officer owned 109,017 shares of the company's stock, valued at approximately $8,176,275. This represents a 15.50% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 905,167 shares of company stock valued at $60,161,837 in the last three months. 8.20% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently made changes to their positions in MP. Benjamin Edwards Inc. grew its stake in MP Materials by 3.8% in the 2nd quarter. Benjamin Edwards Inc. now owns 79,798 shares of the company's stock valued at $4,469,000 after acquiring an additional 2,922 shares during the period. EverSource Wealth Advisors LLC raised its position in MP Materials by 1,679.2% during the second quarter. EverSource Wealth Advisors LLC now owns 41,561 shares of the company's stock worth $2,328,000 after acquiring an additional 39,225 shares during the period. Hunter Associates Investment Management LLC purchased a new position in MP Materials during the second quarter valued at $493,000. WMS Group LLC grew its position in shares of MP Materials by 3.3% in the second quarter. WMS Group LLC now owns 11,326 shares of the company's stock valued at $634,000 after purchasing an additional 362 shares during the period. Finally, BankChampaign National Association grew its position in shares of MP Materials by 4.9% in the second quarter. BankChampaign National Association now owns 10,368 shares of the company's stock valued at $581,000 after purchasing an additional 485 shares during the period. Hedge funds and other institutional investors own 52.55% of the company's stock.

About MP Materials

MP Materials Corporation operates as a vertically integrated producer of rare earth materials in North America. The company owns and manages the Mountain Pass Rare Earth Mine and Processing Facility in California, the only commercially viable rare earth mining and processing site in the United States. MP Materials extracts, separates and refines critical rare earth elements—such as neodymium, praseodymium, and cerium—which are essential inputs for permanent magnets used in electric vehicles, wind turbines, and various defense applications.

The Mountain Pass mine first began commercial rare earth production in the 1950s and was later operated by Molycorp until its bankruptcy in 2015.

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